Action Enterprises, Inc. By and Through Lindeman v. McCalla

Citation855 P.2d 111,259 Mont. 167
Decision Date23 June 1993
Docket NumberNo. 92-458,92-458
PartiesACTION ENTERPRISES, INC., by and through shareholders Duane B. LINDEMAN and Mildred E. Lindeman, shareholders, Plaintiffs and Appellants, v. Charles E. McCALLA, shareholder, Defendant and Respondent.
CourtUnited States State Supreme Court of Montana

Karl Knuchel, Livingston, for plaintiffs and appellants.

Charles R. Cashmore, Crowley, Haughey, Hanson, Toole & Dietrich, Billings, for defendant and respondent.

TRIEWEILER, Justice.

This is an appeal from a decision of the District Court of the Sixth Judicial District in Park County, Montana, which held that plaintiffs' cause of action is barred by the three-year statute of limitations set forth in § 27-2-202(3), MCA, and granted summary judgment in favor of defendant. We affirm.

The sole issue on appeal is whether the District Court erred when it held that plaintiffs' cause of action was barred by the statute of limitations?

Plaintiffs Duane Lindeman and Mildred Lindeman (the Lindemans) owned 50 percent of Action Enterprises, Inc. (the Corporation). Charles McCalla (McCalla) and his wife, Ann McCalla, owned the remaining 50 percent of the Corporation.

During the course of the Corporation's operation, it borrowed money from the First National Park Bank to build a single-family home. In 1981, McCalla contributed a loan of $44,263.44 to the Corporation to pay off the bank mortgage on the single-family home. On September 10, 1986, the Corporation sold the same home for $45,000 and the money was deposited into the Corporation account.

On September 15, 1986, McCalla issued a check to himself drawn on the Corporation account in the amount of $44,263.44. McCalla asserted that this withdrawal was to repay himself for the money that he loaned to the Corporation to pay off the bank mortgage. On September 21, 1990, the Corporation, by and through its shareholders, the Lindemans, filed a lawsuit against McCalla, demanding the return of funds which the Lindemans alleged McCalla withdrew without corporate authority.

McCalla filed a motion for summary judgment, asserting that the Lindemans' action was barred by the statute of limitations. The Lindemans also filed a motion for summary judgment. On July 13, 1992, the District Court granted summary judgment in favor of McCalla.

In its order granting summary judgment, the District Court explained that because the check written by McCalla constituted "a purported obligation or liability not founded upon an instrument in writing," the three-year statute of limitations found in § 27-2-202(3), MCA, was applicable. The court determined that although the Lindemans were aware of the $44,263.44 withdrawal for approximately four years, they failed to commence their lawsuit within the three-year time period prescribed by § 27-2-202(3), MCA. Accordingly, the court concluded that the Lindemans' action was barred by the statute of limitations and granted summary judgment in favor of McCalla.

On appeal, the Lindemans assert that the District Court erred when it applied the three-year statute of limitations found in § 27-2-202(3), MCA, to their claim against McCalla. The Lindemans contend that the check for $44,263.44 written by McCalla constitutes a "writing," and therefore, the appropriate statute of limitations is the eight-year period found in § 27-2-202(1), MCA. The Lindemans maintain that because they filed their cause of action within eight years after the "writing" was made, their lawsuit is not barred by the statute of limitations, and they should be allowed to try their case on its merits.

Alternatively, the Lindemans assert that if the check is not a "writing" which constitutes a contract for purposes of the eight-year statute of limitations, then at a minimum, the five-year statute of limitations set forth in § 27-2-202(2), MCA, should apply. For purposes of asserting the applicability of § 27-2-202(2), MCA, the Lindemans contend that the check created an "account" which is not founded upon an instrument in writing; and that the account is recoverable as an unauthorized loan from the Corporation to McCalla.

McCalla also challenges the statute of limitations applied by the District Court. He agrees with the District Court that the Lindemans'...

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4 cases
  • Estate of Hill, In re
    • United States
    • Montana Supreme Court
    • March 6, 1997
    ... ... , 886 P.2d at 420 (citing Audit Services, Inc. v. Systad (1992), 252 Mont. 62, 65, 826 P.2d ... ...
  • Johnson Farms, Inc. v. Halland
    • United States
    • Montana Supreme Court
    • October 2, 2012
    ...statute of limitations applies, this Court will look to the substance of the complaint. Action Enters. by & Through Lindeman v. McCalla, 259 Mont. 167, 169, 855 P.2d 111, 113 (1993) (citing Weible v. Ronan State Bank, 238 Mont. 235, 237, 776 P.2d 837, 838 (1989)). “ ‘If the gravamen of the ......
  • Estate of Lahren, Matter of
    • United States
    • Montana Supreme Court
    • December 13, 1994
    ... ... the status of the CDs and came to believe through independent review and evaluation that the CDs ... ...
  • Kingman v. Weightman
    • United States
    • Montana Supreme Court
    • September 12, 2017
    ...of personal property...." We have applied this section to conversion claims. See Action Enters. by & Through Lindeman v. McCalla , 259 Mont. 167, 170, 855 P.2d 111, 113 (1993). ¶ 11 A statutory procedure governs the return of property seized as evidence. Section 46-5-312, MCA, provides that......

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